CAC & Customer Lifetime Value Calculator

Enter what you spent on marketing and how many new customers it brought, then what a customer is worth to you. You see whether each new customer pays for themselves.

Quick answer: CAC = marketing spend ÷ new customers. LTV = order value × margin × orders per customer. If $500 of ads brings 25 customers, CAC is $20; with a $40 order, a 50% margin and 2.5 orders per customer, LTV is $50 and the LTV to CAC ratio is 2.5 to 1.

Your numbers

Live
Ads and other costs of winning customers in the period.
First-time buyers in the same period.
Margin & repeat orders
What you keep from an order after product, shipping and fees.
1 if customers buy only once.
Customer acquisition cost (CAC)—
Profit per order before marketing
—
Lifetime value (profit per customer)
—
LTV to CAC ratio
—
Profit on the first order after CAC
—
Orders needed to pay back CAC
—
Highest CAC for a 3 : 1 ratio
—
Lifetime profit from these customers after marketing
—

Results update as you type. Nothing is sent anywhere.

What CAC and LTV mean

Customer acquisition cost (CAC) is what you spend to win one new customer. Lifetime value (LTV) is the profit that customer brings over all their orders. A shop grows safely when LTV is clearly higher than CAC.

CAC = marketing spend ÷ new customers
Profit per order = order value × margin
LTV = profit per order × orders per customer
LTV to CAC ratio = LTV ÷ CAC

LTV here is counted in profit, not revenue. Comparing revenue with CAC makes ads look far better than they are.

Example

LineAmount
CAC ($500 ÷ 25 customers)$20.00
Profit per order ($40 × 50%)$20.00
LTV ($20 × 2.5 orders)$50.00
LTV to CAC ratio2.50 : 1
Profit on the first order after CAC$0.00
Lifetime profit from the 25 customers after marketing$750.00

The first order only pays back the ad cost. The profit comes from the 1.5 repeat orders, so this shop depends on customers coming back.

Reading the ratio

LTV : CACWhat it means
Below 1 : 1Each customer costs more than they bring. Stop or fix the campaign.
1 : 1 to 2 : 1Marketing roughly pays for itself, with little left for other costs.
About 3 : 1A widely used rule of thumb for a healthy balance.
Well above 3 : 1Profitable; you may be able to spend more to grow faster.

The 3 : 1 figure is a rule of thumb, not a law. A shop with slow repeat orders needs more cash to wait for the payback than one whose customers return in a month.

Using it in a small shop

This calculator uses only your own numbers.

Frequently asked questions

How do I calculate CAC?

Divide what you spent on marketing in a period by the number of new customers won in the same period. $500 of ads and 25 new customers is a CAC of $20.

How do I calculate customer lifetime value?

For a small shop: average order value × profit margin × the number of orders a customer places over time. $40 × 50% × 2.5 = $50.

What is a good LTV to CAC ratio?

A common rule of thumb is about 3 to 1. Below 1 to 1 you lose money on each customer.

Should LTV use revenue or profit?

Profit. Product costs, shipping and fees must be paid from each order, so only the margin is available to pay for marketing.

Last reviewed: November 2026 · By Muhammad Shujah Uddin Qazi · How we check rates · Fee changes tracker

Cite, link or embed this calculator

Cite (APA style)Qazi, M. S. U. (2026). CAC & Customer Lifetime Value Calculator. PriceTag Math. https://pricetagmath.com/cac-ltv-calculator/

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